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Puerto Rico gov’t announces signing of Prepa’s RSA

By on April 28, 2017

San Juan — The government of Puerto Rico signed on April 26 a new restructuring support agreement (RSA) with a group of creditors of the Electric Power Authority (Prepa), which incorporates the terms announced April 5, stated Friday night the Financial Advisory & Fiscal Agency Authority (FAFAA).

The new RSA provides for a consensual debt restructuring process under Title VI of Promesa, within a schedule to complete the transactions established by the agreement on or before Sept. 30. The public statement adds that the new RSA also incorporates the “additional estimated savings” of $2.2 billion in Prepa debt service from 2018 to 2022.

“I am pleased that we were able to complete the negotiations of a supplement to the RSA with PREPA’s major creditors,” said FAFAA’s director, Gerardo Portela, in a written statement.

The agreement was signed by the ad hoc group of Prepa bondholders,  fuel line lenders, bond insurers and the Government Development Bank. Meanwhile, the public corporation and FAFAA were assisted in the negotiations by Rothschild & Co. as financial adviser, Bank of America-Merrill Lynch as investment bank, Ankura Consulting as financial adviser, and Greenberg Traurig LLP as legal adviser.

For his part, the government representative before the fiscal control board, Elías Sánchez, said that the intention of the administration of Gov. Ricardo Rosselló is “to promptly begin preparing for implementation of the restructuring and modifications contemplated under the RSA pursuant to Title VI of PROMESA as required by the terms of the RSA.”

Earlier Friday, the fiscal board certified—subject to a series of amendments—a fiscal plan for Prepa. The RSA must be in compliance with the plan certified by the governing body established by the federal Promesa law.

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